j2 Reports Q3 2013 Results

LOS ANGELES--(BUSINESS WIRE)--
j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the
third quarter ended September 30, 2013 and announced that its Board of
Directors has declared a quarterly cash dividend of $0.255 per share,
j2's ninth consecutive quarterly dividend increase.

THIRD QUARTER 2013 RESULTS

Quarterly revenues increased 37.0% to $127.8 million compared to $93.2
million for Q3 2012 driven primarily by Digital Media revenues of $33.5
million compared to nil for Q3 2012 and 4.2% growth in Business Cloud
Services subscription revenues to $93.4 million compared to $89.6
million for Q3 2012, partially offset by a decrease in intellectual
property (IP) licensing revenues to $1.0 million from $3.0 million for
Q3 2012.

GAAP earnings per diluted share (EPS) was impacted by $0.13 in the
quarter due to $0.07 of "additional income tax benefit from prior years"
recognized in Q3 2012 but not in Q3 2013, $0.03 from the shortfall in IP
licensing revenues and $0.02 in additional interest expense recognized
in Q3 2013 from a full-quarter of interest on j2's Senior Notes versus
approximately nine weeks of such interest in Q3 2012, resulting in Q3
2013 GAAP EPS of $0.59 compared to $0.69 for Q3 2012. Non-GAAP EPS (1)(2)
was impacted by $0.06 in the quarter due to $0.03 from the shortfall in
IP licensing revenues and $0.02 from the incremental interest expense on
j2's Senior Notes, resulting in Q3 2013 Non-GAAP EPS of $0.64 compared
to $0.65 for Q3 2012.

Quarterly EBITDA (3) increased 5.6% to $52.8 million compared
to $50.0 million for Q3 2012, despite a reduction of $2.0 million in
EBITDA from IP licensing.

Free cash flow (4) for the quarter decreased to $22.3 million
compared to $37.1 million for Q3 2012, primarily due to increases in
accounts receivable related to the Digital Media division and the timing
of payments of accounts payable and accrued expenses versus Q3 2012
resulting in a change in the Company's working capital accounts of $11.5
million and an increase in capital additions of $4.2 million versus Q3
2012.

Cancel rate (5) for the quarter improved to 2.27% versus
2.28% for Q3 2012, remaining at near historic lows.

Net paid DIDs grew by approximately 29,000 during the quarter and total
net paid DIDs deployed at quarter-end reached an all-time high of 2.22
million.

j2 ended the quarter with approximately $375 million in cash and
investments.

Key financial results for Q3 2013 versus Q3 2012 are set forth in the
following table (in millions, except earnings per share).
Reconciliations of non-GAAP earnings per diluted share, EBITDA and free
cash flow to their nearest comparable GAAP financial measures are
attached to this Press Release.

Q3 2013

Q3 2012

% Change

Revenues

$127.8 million

$93.2 million

37.0 %

Earnings per Diluted Share (1)

$0.59

$0.69

(14.5)%

Non-GAAP Earnings per Diluted Share (1) (2)

$0.64

$0.65

(1.5)%

EBITDA (3)

$52.8 million

$50.0 million

5.6 %

Free Cash Flow(4)

$22.3 million

$37.1 million

(39.9)%

"We are extremely pleased that we have achieved our targeted
diversification and growth in revenues in our digital media and business
cloud subscription operations while maintaining our focus on
profitability and cash flow," said Hemi Zucker, CEO of j2. "I am very
pleased with the results of our IP licensing operations for the first
nine months of the year, which have produced $16.8 million in revenues
versus $3.8 million for the comparable year ago period; however, this
quarter produced $1.0 million in IP licensing revenues, which is at the
low end of our quarterly expectations."

"In the past six fiscal quarters, we have generated $0.5 million, $3.0
million, $1.8 million, $0.9 million, $14.9 million and $1.0 million in
IP licensing revenues," said Scott Turicchi, president of j2. "These
results clearly demonstrate the value of our IP portfolio and also
demonstrate the volatility of this activity, as virtually all of this
revenue drops to the bottom line. The timing of IP licensing revenues is
hard to predict as it often involves litigation."

BUSINESS OUTLOOK

j2 is reaffirming its previously increased fiscal 2013 revenues estimate
of between $510 and $535 million and its previously increased fiscal
2013 non-GAAP earnings per diluted share estimate of between $2.78 and
$2.98.

Non-GAAP earnings per diluted share for 2013 excludes, prior to tax,
acquisition-related integration costs of approximately $7.9 million and
share-based compensation of between $9 and $10 million.

It is anticipated that the normalized tax rate for 2013 will be less
than 25%.

DIVIDEND

j2's Board of Directors has approved its tenth consecutive quarterly
cash dividend, in this case in the amount of $0.255 per common share,
which is a 3.0% increase versus last quarter's dividend and a 13.3%
increase versus the dividend paid in Q4 2012. This is j2's ninth
consecutive quarterly dividend increase and represents a 27.5% increase
versus its first quarterly dividend in September 2011. The dividend will
be paid on December 4, 2013 to all shareholders of record as of the
close of business on November 18, 2013. Future dividends will be subject
to Board approval.

Notes :

(1)

The estimated GAAP effective tax rates were approximately 20.5% for
Q3 2013 and 19.9% for Q3 2012. The estimated Non-GAAP effective tax
rates were approximately 21.9% for Q3 2013 and 28.1% for Q3 2012.

EBITDA is defined as earnings before interest and other expense,
net; income tax expense; depreciation and amortization; and the
items used to reconcile GAAP to Non-GAAP financial measures referred
to in Note (2) above. EBITDA amounts are not meant as a substitute
for GAAP, but are solely for informational purposes.

(4)

Free cash flow is defined as net cash provided by operating
activities, less purchases of property, plant and equipment, plus
excess tax benefit from share-based compensation. Free cash flow
amounts are not meant as a substitute for GAAP, but are solely for
informational purposes.

(5)

Cancel rate is defined as cancels related to individual customer
DIDs with greater than four months of continuous service (continuous
service includes customer DIDs administratively cancelled and
reactivated within the same calendar month), and DIDs related to
enterprise customers beginning with their first day of service. For
the quarter, calculated monthly and expressed here as an average
over the three months of the quarter. For the year, expressed as an
average over the four quarters of the year.

About j2

j2 Global, Inc. (NASDAQGS:JCOM) provides Internet services through its
two divisions: Business Cloud Services and Digital Media. The Business
Cloud Services Division offers Internet fax, virtual phone, hosted
email, email marketing, online backup, unified communications and CRM
solutions. It markets its services principally under the brand names eFax®,
eVoice®, FuseMail®, Campaigner®,
KeepItSafe® and Onebox® and operates a messaging
network spanning 49 countries on six continents. The Digital Media
Division consists of Ziff Davis Inc., which offers technology, gaming
and lifestyle content through its digital properties which include
PCMag.com, IGN.com, AskMen.com, Toolbox.com and others. Ziff Davis also
operates NetShelter Powered by BuyerBase, an advanced digital ad
targeting platform, and Ziff Davis B2B, a leading provider of research
to enterprise buyers and leads to IT vendors. As of December 31, 2012,
j2 had achieved 17 consecutive fiscal years of revenue growth. For more
information about j2, please visit www.j2global.com.

"Safe Harbor" Statement Under the Private Securities Litigation
Reform Act of 1995: Certain statements in this Press Release are
"forward-looking statements" within the meaning of The Private
Securities Litigation Reform Act of 1995, particularly those contained
in the "Business Outlook" portion regarding the Company's expected
fiscal 2013 financial performance. These forward-looking statements are
based on management's current expectations or beliefs and are subject to
numerous assumptions, risks and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. These factors and uncertainties include, among other items:
ability to successfully diversify and grow our business, including both
the Business Cloud Services and Digital Media Divisions; ability to
identify, close and successfully integrate acquisitions; risks of
geographic expansion; risks that markets we choose to enter fail to
achieve desired levels of growth and profitability prospects; subscriber
growth and retention; variability of revenue based on changing
conditions in particular industries and the economy generally;
protection of the Company's proprietary technology or infringement by
the Company of intellectual property of others; the risk of adverse
changes in the U.S. or international regulatory environments surrounding
messaging and communications, including but not limited to the
imposition or increase of taxes or regulatory-related fees; and the
numerous other factors set forth in j2's filings with the Securities and
Exchange Commission ("SEC"). For a more detailed description of the risk
factors and uncertainties affecting j2, refer to the 2012 Annual Report
on Form 10-K filed by j2 on March 1, 2013, and the other reports filed
by j2 from time-to-time with the SEC, each of which is available at www.sec.gov.
The forward-looking statements provided in this press release and
particularly those contained in the "Business Outlook" portion regarding
the Company's expected fiscal 2013 financial performance are based on
limited information available to the Company at this time, which is
subject to change. Although management's expectations may change after
the date of this press release, the Company undertakes no obligation to
revise or update these statements.

j2 GLOBAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS)

SEPTEMBER 30,

DECEMBER 31,

2013

2012

ASSETS

Cash and cash equivalents

$

199,181

$

218,680

Short-term investments

108,043

105,054

Accounts receivable, net of allowances of $3,735 and $3,213,
respectively

64,279

37,285

Prepaid expenses and other current assets

22,779

15,388

Deferred income taxes

2,729

1,092

Total current assets

397,011

377,499

Long-term investments

66,899

19,841

Property and equipment, net

30,143

19,599

Goodwill

441,687

407,825

Other purchased intangibles, net

196,811

165,316

Deferred income taxes

2,130

1,852

Other assets

3,409

3,238

TOTAL ASSETS

$

1,138,090

$

995,170

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable and accrued expenses

$

68,430

$

39,874

Income taxes payable

1,736

3,004

Deferred revenue

35,675

30,493

Liability for uncertain tax positions

5,535

5,523

Deferred income taxes

5,098

33

Total current liabilities

116,474

78,927

Long-term debt

245,548

245,194

Liability for uncertain tax positions

36,010

32,155

Deferred income taxes

41,635

32,393

Deferred revenue

12,041

1,609

Other long-term liabilities

1,787

1,557

Mandatorily redeemable financial instrument

9,760

8,740

Total liabilities

463,255

400,575

Commitments and contingencies

—

—

Stockholders' Equity:

Preferred stock

—

—

Common stock

459

451

Additional paid-in capital

191,287

169,542

Retained earnings

475,979

424,790

Accumulated other comprehensive income (loss)

8,646

(88

)

Total j2 Global, Inc. stockholder's equity

676,371

594,695

Noncontrolling interest

(1,536

)

(100

)

Total stockholders' equity

674,835

594,595

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,138,090

$

995,170

j2 GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

THREE MONTHS ENDED

NINE MONTHS ENDED

SEPTEMBER 30,

SEPTEMBER 30,

2013

2012

2013

2012

Revenues

$

127,788

$

93,246

$

382,766

$

269,363

Cost of revenues (including share-based compensation of $162 and
$581 for the three and nine months of 2013, respectively, and $199
and $633 for the three and nine months of 2012, respectively)

21,801

16,303

64,715

48,354

Gross profit

105,987

76,943

318,051

221,009

Operating expenses:

Sales and marketing (including share-based compensation of $465 and
$1,315 for the three and nine months of 2013, respectively, and $390
and $1,117 for the three and nine months of 2012, respectively)

34,787

15,190

99,638

43,910

Research, development and engineering (including share-based
compensation of $103 and $311 for the three and nine months of 2013,
respectively, and $111 and $344 for the three and nine months of
2012, respectively)

6,000

4,692

19,134

13,798

General and administrative (including share-based compensation of
$1,695 and $4,901 for the three and nine months of 2013,
respectively, and $1,703 and $4,757 for the three and nine months of
2012, respectively)

25,892

14,784

74,377

43,387

Total operating expenses

66,679

34,666

193,149

101,095

Income from operations

39,308

42,277

124,902

119,914

Interest and other (expense) income, net

(4,576

)

(2,747

)

(14,109

)

(2,657

)

Income before income taxes

34,732

39,530

110,793

117,257

Income tax expense

7,105

7,880

24,428

25,880

Net income

27,627

31,650

86,365

91,377

Less net loss attributable to noncontrolling interest

(179

)

—

(403

)

—

Net income attributable to j2 Global, Inc. common stockholders

$

27,806

$

31,650

$

86,768

$

91,377

Basic net income per common share:

Net income attributable to j2 Global, Inc. common stockholders

$

0.60

$

0.69

$

1.88

$

1.97

Diluted net income per common share:

Net income attributable to j2 Global, Inc. common stockholders

$

0.59

$

0.69

$

1.85

$

1.96

Basic weighted average shares outstanding

45,729,171

45,002,565

45,441,265

45,590,160

Diluted weighted average shares outstanding

46,291,631

45,340,111

46,066,604

45,897,389

j2 GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED, IN THOUSANDS)

NINE MONTHS ENDED SEPTEMBER 30,

2013

2012

Cash flows from operating activities:

Net income

$

86,365

$

91,377

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization

28,424

15,555

Accretion and amortization of discount and premium of investments

1,323

1,090

Amortization of financing costs and discounts

456

104

Share-based compensation

7,108

6,816

Excess tax benefit from share-based compensation

(3,171

)

(1,016

)

Provision for doubtful accounts

2,565

3,520

Deferred income taxes

472

(1,012

)

Decrease (increase) in:

Accounts receivable

(7,495

)

(7,032

)

Prepaid expenses and other current assets

945

(951

)

Other assets

285

(362

)

(Decrease) increase in:

Accounts payable and accrued expenses

4,035

168

Income taxes payable

(3,286

)

7,112

Deferred revenue

13,049

1,611

Liability for uncertain tax positions

3,867

6,538

Other liabilities

(62

)

(1

)

Net cash provided by operating activities

134,880

123,517

Cash flows from investing activities:

Maturity of certificate of deposit

42,615

8,000

Purchase of certificates of deposit

(22,071

)

(34,674

)

Sales of available-for-sale investments

82,889

64,581

Purchases of available-for-sale investments

(139,955

)

(140,785

)

Purchases of property and equipment

(11,115

)

(3,746

)

Purchases of intangible assets

(2,784

)

(3,668

)

Acquisition of businesses, net of cash received

(81,566

)

(25,108

)

Net cash used in investing activities

(131,987

)

(135,400

)

Cash flows from financing activities:

Issuance of long-term debt

—

245,000

Debt issuance costs

(47

)

(1,342

)

Repurchases of common stock and restricted stock

(4,513

)

(60,261

)

Issuance of common stock under employee stock purchase plan

161

109

Exercise of stock options

13,515

4,865

Excess tax benefit from share-based compensation

3,171

1,016

Dividends paid

(33,267

)

(29,940

)

Other

(171

)

—

Net cash (used in) provided by financing activities

(21,151

)

159,447

Effect of exchange rate changes on cash and cash equivalents

(1,241

)

591

Net (decrease) increase in cash and cash equivalents

(19,499

)

148,155

Cash and cash equivalents at beginning of period

218,680

139,359

Cash and cash equivalents at end of period

$

199,181

$

287,514

j2 GLOBAL, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

THREE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Non-GAAP net income is GAAP net income with the following
modifications: (1) elimination of share-based compensation; (2)
elimination of certain acquisition-related integration costs; (3)
elimination of additional income tax benefit from prior years and
(4) elimination of income tax provision associated with
share-based compensation and certain acquisition-related
integration costs.

THREE MONTHS ENDED SEPTEMBER 30, 2013

THREE MONTHS ENDED SEPTEMBER 30, 2012

(2)

(3)

Acquisition-

Additional

(1)

related

(1)

Income Tax

Share-based

Integration

Share-based

Benefit from

GAAP

Compensation

Costs

Non-GAAP

GAAP

Compensation

Prior Years

Non-GAAP

Revenues

$

127,788

—

(814

)

$

126,974

$

93,246

—

—

$

93,246

Cost of revenues

21,801

(162

)

—

21,639

16,303

(199

)

—

16,104

Operating expenses:

Sales and marketing

34,787

(465

)

(1,379

)

32,943

15,190

(390

)

—

14,800

Research, development and engineering

6,000

(103

)

—

5,897

4,692

(111

)

—

4,581

General and administrative

25,892

(1,695

)

(373

)

23,824

14,784

(1,717

)

—

13,067

Interest and other (expense) income, net

(4,576

)

—

—

(4,576

)

(2,747

)

—

—

(2,747

)

Income tax provision (4)

7,105

831

403

8,339

7,880

832

3,066

11,778

Net income attributable to j2 Global, Inc.

common stockholders

$

27,806

1,594

535

$

29,935

$

31,650

1,585

(3,066

)

$

30,169

Net income per share attributable to j2 Global, Inc. common
stockholders*:

Basic

$

0.60

0.04

0.01

$

0.64

$

0.69

0.04

(0.07

)

$

0.66

Diluted

$

0.59

0.03

0.01

$

0.64

$

0.69

0.04

(0.07

)

$

0.65

* The reconciliation of Net income per share from GAAP to non-GAAP
may not foot since each is calculated independently.

The Company discloses non-GAAP Earnings Per Share (EPS) as
supplemental non-GAAP financial performance measure, as it
believes it is a useful metric by which to compare the performance
of its business from period to period. The Company also
understands that this non-GAAP measure is broadly used by
analysts, rating agencies and investors in assessing the Company's
performance. Accordingly, the Company believes that the
presentation of this non-GAAP financial measure provides useful
information to investors.

Non-GAAP EPS is not in accordance with, or an alternative to, Net
income per share and may be different from non-GAAP measures with
similar or even identical names used by other companies. In
addition, this non-GAAP measure is not based on any comprehensive
set of accounting rules or principles. This non-GAAP measure has
limitations in that it does not reflect all of the amounts
associated with the Company's results of operations determined in
accordance with GAAP.

j2 GLOBAL, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Non-GAAP net income is GAAP net income with the following
modifications: (1) elimination of share-based compensation; (2)
elimination of certain acquisition-related integration costs; (3)
elimination of gain on sale of certain investment; (4) elimination
of additional income tax benefit from prior years and (5)
elimination of income tax provision associated with share-based
compensation, certain acquisition-related integration costs and
gain on sale of certain investment.

NINE MONTHS ENDED SEPTEMBER 30, 2013

NINE MONTHS ENDED SEPTEMBER 30, 2012

(2)

(2)

(4)

Acquisition-

Acquisition-

(3)

Additional

(1)

related

(1)

related

Gain on

Income Tax

Share-based

Integration

Share-based

Integration

Sale of

Benefit from

GAAP

Compensation

Costs

Non-GAAP

GAAP

Compensation

Costs

Investment

Prior Years

Non-GAAP

Revenues

$

382,766

—

(2,206

)

$

380,560

$

269,363

—

—

—

—

$

269,363

Cost of revenues

64,715

(581

)

(88

)

64,046

48,354

(633

)

(6

)

—

—

47,715

Operating expenses:

Sales and marketing

99,638

(1,315

)

(4,432

)

93,891

43,910

(1,117

)

(90

)

—

—

42,703

Research, development and engineering

19,134

(311

)

(579

)

18,244

13,798

(344

)

(5

)

—

—

13,449

General and administrative

74,377

(4,901

)

(4,122

)

65,354

43,387

(4,847

)

(48

)

—

—

38,492

Interest and other (expense) income, net

(14,109

)

—

—

(14,109

)

(2,657

)

—

—

(180

)

—

(2,837

)

Income tax provision (5)

24,428

2,384

3,009

29,821

25,880

2,275

34

(43

)

3,066

31,212

Net income attributable to j2 Global, Inc.

common stockholders

$

86,768

4,724

4,006

$

95,498

$

91,377

4,666

115

(137

)

(3,066

)

$

92,955

Net income per share attributable to

j2 Global, Inc. common stockholders*:

Basic

$

1.88

0.11

0.09

$

2.07

$

1.97

0.10

0.00

0.00

(0.07

)

$

2.00

Diluted

$

1.85

0.10

0.09

$

2.04

$

1.96

0.10

0.00

0.00

(0.07

)

$

1.99

* The reconciliation of Net income per share from GAAP to non-GAAP
may not foot since each is calculated independently.

The Company discloses non-GAAP Earnings Per Share (EPS) as
supplemental non-GAAP financial performance measure, as it
believes it is a useful metric by which to compare the performance
of its business from period to period. The Company also
understands that this non-GAAP measure is broadly used by
analysts, rating agencies and investors in assessing the Company's
performance. Accordingly, the Company believes that the
presentation of this non-GAAP financial measure provides useful
information to investors.

Non-GAAP EPS is not in accordance with, or an alternative to, Net
income per share and may be different from non-GAAP measures with
similar or even identical names used by other companies. In
addition, this non-GAAP measure is not based on any comprehensive
set of accounting rules or principles. This non-GAAP measure has
limitations in that it does not reflect all of the amounts
associated with the Company's results of operations determined in
accordance with GAAP.

j2 GLOBAL, INC.

NET INCOME TO EBITDA RECONCILIATION

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

(UNAUDITED, IN THOUSANDS)

The following table sets forth a reconciliation of EBITDA to net
income, the most directly comparable GAAP financial measure.

THREE MONTHS ENDED

NINE MONTHS ENDED

SEPTEMBER 30,

SEPTEMBER 30,

2013

2012

2013

2012

Net income

$

27,627

$

31,650

$

86,365

$

91,377

Plus:

Interest and other expense, net

4,576

2,747

14,109

2,657

Income tax expense

7,105

7,880

24,428

25,880

Depreciation and amortization

10,178

5,351

28,426

15,531

Reconciliation of GAAP to Non-GAAP financial measures:

Share-based compensation

2,425

2,417

7,108

6,941

Acquisition-related integration costs

938

—

7,015

149

EBITDA

$

52,849

$

50,045

$

167,451

$

142,535

EBITDA as calculated above represents earnings before interest and
other expense, net, income tax expense, depreciation and
amortization and the items used to reconcile GAAP to non-GAAP
financial measures, including (1) share-based compensation and (2)
certain acquisition-related integration costs. We disclose EBITDA as
a supplemental non-GAAP financial performance measure as we believe
it is a useful metric by which to compare the performance of our
business from period to period. We understand that measures similar
to EBITDA are broadly used by analysts, rating agencies and
investors in assessing our performance. Accordingly, we believe that
the presentation of EBITDA provides useful information to investors.

EBITDA is not in accordance with, or an alternative to, Net income,
and may be different from non-GAAP measures used by other companies.
In addition, EBITDA is not based on any comprehensive set of
accounting rules or principles. This non-GAAP measure has
limitations in that it does not reflect all of the amounts
associated with the company's results of operations determined in
accordance with GAAP.

j2 GLOBAL, INC.

NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

Q1

Q2

Q3

Q4

YTD

2013

Net cash provided by operating activities

$

40,048

$

68,973

$

25,859

$

134,880

Less: Purchases of property and equipment

(1,933

)

(4,056

)

(5,126

)

(11,115

)

Add: Excess tax benefit from share-based compensation

280

1,301

1,590

3,171

Free cash flows

$

38,395

$

66,218

$

22,323

$

-

$

126,936

2012

Net cash provided by operating activities

$

38,942

$

46,382

$

38,193

$

46,394

$

169,911

Less: Purchases of property and equipment

(1,159

)

(1,631

)

(956

)

(1,159

)

(4,905

)

Add: Excess tax benefit (deficit) from share-based compensation

286

821

(91

)

(55

)

961

Free cash flows

$

38,069

$

45,572

$

37,146

$

45,180

$

165,967

The Company discloses non-GAAP Free Cash Flows as supplemental
non-GAAP financial performance measure, as it believes it is a
useful metrics by which to compare the performance of its business
from period to period. The Company also understands that this
non-GAAP measure is broadly used by analysts, rating agencies and
investors in assessing the Company's performance. Accordingly, the
Company believes that the presentation of this non-GAAP financial
measure provides useful information to investors.

Free Cash Flows is not in accordance with, or an alternative to,
Cash Flows from Operating Activities, and may be different from
non-GAAP measures with similar or even identical names used by
other companies. In addition, the non-GAAP measure is not based on
any comprehensive set of accounting rules or principles. This
non-GAAP measure has limitations in that it does not reflect all
of the amounts associated with the Company's results of operations
determined in accordance with GAAP.